The current daily cycle sports a day 5 peak with Friday being day 7.
If the current daily cycle is to form in a left translated manner, then we should see a peak in the coming week. Any new highs past Monday will begin to shift the likelihood of the current daily cycle forming as a right translated cycle. If this cycle forms as a right translated cycle then we would expect to see one more daily cycle that forms as a left translated, failed daily cycle which would then lead to the intermediate cycle decline.
Friday was day 7 for the daily equity cycle and stocks closed once again at all time highs.
While stocks are at all time highs there is a bearish divergence developing on the True Strength Indicator foreshadowing trouble ahead.
Another troubling signal is the total accumulated Selling on Strength (S.O.S.) numbers for this intermediate cycle. Stocks printed a total of 4858 in Selling on Strength during the first daily cycle. This second daily cycle has added another 3862 in Selling on Strength totaling 8720 in Selling on Strength so far for this intermediate cycle. These are historically huge numbers.
I put these S.O.S. numbers in perspective in the Weekend Report. And we will also look at a bearish signal that occurred twice in the last two months. The only other time I have seen this bearish signal was prior to the 2009 financial crisis bottom.
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